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The 12-month-old restriction on P-notes has been finally removed on October 6, 2008 by the Securities and Exchange Board of India (SEBI). The SEBI in an official statement said that from now onwards Foreign Institutional Investors (FII) can use P-notes. According to SEBI Chairman C B Bhave, the regulator ensured to lift the 40 per cent restriction for issuance of P-notes for both cash and derivative segments. Experts opine that this move by SEBI will help to revive the stock markets affected by global financial meltdown.
SEBI has imposed the restrictions in October, 2007 under which it barred the FIIs to issue or renew the P-notes to foreign individuals. Talking about the removal of restriction, Bhave said that since the issuance of P-notes has diminished in the last one year the regulator has decided to take the immediate step. SEBI is also reported to enhance the stakes owned in recognized stock exchanges by six categories of shareholders from the existing 5 per cent to 15 per cent.
